Sales of Nintendo's flagship Switch 2 console fell significantly during the fiscal second quarter ending September 30, with the Japanese gaming giant moving only 2.67 million units. This figure represents a 41% decrease compared to the same period last year and is also lower than the 3.82 million units sold in the preceding quarter.
The decline coincides with Nintendo implementing price hikes for the Switch 2 in the United States, Canada, and Japan, following an earlier price increase in Japan earlier this year. Compounding these challenges is a severe shortage of memory chips, a core component of the consoles. High demand and limited supply have driven unprecedented price surges for these chips, impacting production costs.
Financially, Nintendo missed market expectations for the quarter. The company reported revenue of 448.2 billion Japanese yen ($2.8 billion), falling short of the LSEG average estimate of 481.37 billion yen. Net profit also came in lower than anticipated at 73.5 billion yen versus an expected 82.16 billion yen.
Despite these setbacks, Nintendo has maintained its sales forecast for the current fiscal year, which concludes in March 2027, at 16.5 million units. While the company has seen success with titles like "Tomodachi Life: Living the Dream" and the viral hit "Pokémon Pokopia," analysts note a lack of major marquee titles to drive hardware sales.
Investors are now looking to the recent release of "The Legend of Zelda: Ocarina of Time," a remake of the iconic game, to provide a necessary boost. Serkan Toto, CEO of Kantan Games, told CNBC that while this is Nintendo's only real blockbuster for the fiscal year, it may not be enough to satisfy investors given the device's increased price point. He emphasized that selling hardware has become increasingly difficult and that Nintendo must deliver more major games in the next fiscal year to sustain momentum. Looking ahead, the company also has new Pokémon games scheduled for release in 2027.
Sources: CNBC Markets.